THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS June 2019 Gary Rynhart & Ravindra Peiris Bureau for Employers’ Activities International Labour Office Copyright © International Labour Organization 2019. First published (2019) Publications of the International Labour Office enjoy copyright under Protocol 2 of the Universal Copyright Convention. Nevertheless, short excerpts from them may be reproduced without authorization, on condition that the source is indicated. For rights of reproduction or translation, application should be made to ILO Publications (Rights and Licensing), International Labour Office, CH-1211 Geneva 22, Switzerland, or by email:[email protected] . The International Labour Office welcomes such applications. Libraries, institutions and other users registered with a reproduction rights organization may make copies in accordance with the licences issued to them for this purpose. Visit www.ifrro.org to find the reproduction rights organization in your country. The Role of the Social Partners in the Nepal Peace Process, International Labour Office, Bureau for Employers’ Activities (ACT/EMP) - Geneva: ILO, 2019 ISBN: 978-92-2-133691-4 (web pdf) The designations employed in ILO publications, which are in conformity with United Nations practice, and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of the International Labour Office concerning the legal status of any country, area or territory or of its authorities, or concerning the delimitation of its frontiers. The responsibility for opinions expressed in signed articles, studies and other contributions rests solely with their authors, and publication does not constitute an endorsement by the International Labour Office of the opinions expressed in them. Reference to names of firms and commercial products and processes does not imply their endorsement by the International Labour Office, and any failure to mention a particular firm, commercial product or process is not a sign of disapproval. Information on ILO publications and digital products can be found at: www.ilo.org/publns. Preface Nepal suffered a bitter armed conflict from 1996 until the signing of the Comprehensive Peace Agreement in November 2006. The war was primarily class-based, with embedded discrimination, poverty and social and political exclusion among its root causes. Between 8,000 and 13,000 people (most of them civilians) were killed in the conflict and about 200,000 were displaced. It was a dark chapter in Nepal’s history. While the conflict formally ended in 2006, in reality many of the underlying causes took a further ten years to resolve themselves. Social and workplace issues were at the core of the conflict and it was the workplace where much of the insurgency played out. Businesses were directly targeted. The period was characterized by volatile relations in workplaces, and strikes and disturbances, which were frequent and occasionally violent. It was a difficult time. This case study describes the role of workers and employers organizations in the conflict. These actors played a critical role in the resolution of the actual issues underlying the strife – a largely under-reported story in the overall Nepal peace and resolution process. This report seeks to fill the gap. The report documents how leaders from trade unions and businesses, through their representative organizations, came together to build a new vision for Nepal: one of partnership based firmly on equity, fairness and dialogue. It outlines the important back channels between Maoists and business leaders and the important journey that trade unions and businesses travelled, showing the personal and professional risks that they took. Importantly, we in the ILO are proud of the role we played in this process as a facilitator. We were able to play this role because of our tripartite structure and the strong institutional links we have with trade unions, employers’ organizations and governments. A new Constitution came into effect in Nepal in September 2015. It is widely viewed as secular and progressive with strong provisions on the rights of minorities and gender. Nepal has also introduced progressive labour law reforms that were developed through a process of dialogue between employers and trade unions. Nepal has many economic and social challenges and poverty remains a major concern. However, the economy is growing, investment is increasing and key sectors like tourism are flourishing. And the workplace, for so long volatile, is finally calm. Deborah France-Massin Richard Howard Director Country Director Bureau for Employers’ Activities ILO Country Office for Nepal International Labour Office International Labour Office THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS iii Contents Preface iii Contents iv Acknowledgements vi Abbreviations vii 1. Background to the conflict 1 1.1. Political, economic and social context to the insurgency 1 1.2. Background to the trade union movement 2 1.3. Trade unions emerge from the dark 3 1.4. The private sector: Organizations, structures and approaches 3 1.5. Initial reform lays the foundation for conflict 5 2. The war: 1996-2006 7 2.1. Phase one (1996-2001) 7 2.2. Phase two (2001-2003) 7 2.3. Phase three (2003-2006) 8 2.4. The workplace becomes a key battleground 8 2.5. Business in the firing line 9 2.6. Collective business action 10 2.7. Establishing back channels for dialogue 11 3. The peace: 2006-2010 15 3.1. New front line: Workplace relations 15 3.2. Peace arrives but instability reigns 17 3.3. Population displacement, infrastructure and land ownership 18 3.4. Weak economic progress results in weak “peace dividend’ 18 3.5. Business radicalizes 19 4. The resolution process: 2010-2018 21 4.1. Pathways to trade union unity 21 4.2. Employers mature 23 4.3. Effective bipartism and tripartism emerge 24 4.4. New environment for industrial relations 24 4.5. Role of the ILO 26 5. Conclusion 29 References 31 Annex I. List of interviewees 33 iv THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS List of Boxes Box 1. Impact of the conflict on business 10 Box 2. Nepal’s National Business Initiative for Peace 11 Box 3. Trade unions reach consensus despite political differences 22 Box 4. A win-win situation for employers and workers 25 THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS v Acknowledgements We wish to acknowledge the contributions of numerous individuals and organizations in developing this working paper. Without their active engagement and expertise, a report of this nature would not have been possible. Their names are listed at the end of this publication. To the individuals who participated in the field interviews we are enormously grateful. Collectively, we thank you for your insights. We would like to express our deep appreciation to Prakash Sharma, our colleague from the ILO Country Office for Nepal who facilitated and participated in all of the interviews. His efforts were essential to this publication. Our gratitude also to Linda Vega Orozco who undertook secondary research, provided data analysis to enhance the fieldwork findings and conducted follow-up interviews. She was instrumental in putting this paper together. We wish to thank our ILO colleagues who provided peer review and technical contributions, including Sanchir Tugschimeg, Saloman Rajbanshi and Richard Howard. vi THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS Abbreviations ANTUF All Nepal Trade Union Federation CNI Confederation of Nepalese Industries CPA Comprehensive Peace Agreement CPN-M Communist Party of Nepal (Maoist) DECONT Democratic Confederation of Nepalese Trade Unions FNCCI Federation of Nepalese Chambers of Commerce and Industry GDP Gross Domestic Product GEFONT General Federation of Nepalese Trade Unions HAN Hotel Association of Nepal ILO International Labour Organization JTUCC Joint Trade Union Coordination Centre NBI National Business Initiative NCC Nepal Chamber of Commerce NTUC Nepal Trade Union Congress OSH Occupational Safety and Health SPA Seven Party Alliance UML Communist Party of Nepal THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS vii viii THE ROLE OF THE SOCIAL PARTNERS IN THE NEPAL PEACE PROCESS 1. Background to the conflict The Maoist insurgency was a decade-long armed conflict against the Government of Nepal. The rebellion was launched by the Communist Party of Nepal (Maoist) (CPN-M) on 13 February 1996 with the primary aim of overthrowing the Nepalese monarchy and establishing a “People’s Republic”.1 Over 13,000 people were killed and 1,300 went missing during the conflict.2 The insurgency was not a struggle for an independent state but one against a political system. The conflict was primarily class-based, and there is common agreement that uneven development and social and political exclusion were among its root causes. The conflict ended formally with the signing of the Comprehensive Peace Agreement (CPA) on 21 November 2006. 1.1. Political, economic and social context to the insurgency The roots of the Nepalese conflict go back to the nineteenth century and the caste-based system that formed the basis for an exclusionary and divisive political entity. The seeds of disaccord and eventual conflict can be found here. The Panchayat system was put in place in 1962 through a new Constitution and continued until it was finally dissolved in 1990 and multi-party democracy, albeit of a tepid kind, came into force.3 Efforts to change the system by a range of actors continued throughout this period. The system was seen as enabling caste-based discrimination even though this became illegal in 1962. The social stratification of the caste system remained. Indeed, it is still engrained in Nepali society today4. In 1996, the year the conflict started, 42 per cent of the population was living under the national poverty line.5 That same year, Nepal ranked 125th among the 147 countries featured in the Human Development Index.6 Nepal ranked fairly well in terms of income inequality as measured by the Gini coefficient, in 55th place out of 110 countries for which data were available.